Professional Documents
Culture Documents
Producers
How Do I Develop A
Strategic Marketing Plan?
Strategic Business Planning for Commercial
Producers
Types of Marketing
• Planning
Strategic Marketing
– Encompasses the entire farm strategy
– Deals with the broader issue of determining
firm’s strategic position in the market and
how to create value from that position
• Product Marketing/Pricing
– Deals with the tactical side of selling a
product
– Similar to a set of standard operating
procedures for marketing a particular
product.
Strategic Business Planning for Commercial
Producers
Marketing
Defined . . .
• Marketing is anticipating the
needs and wants of targeted
customers and managing the
process through which these
needs and wants are
satisfied . . . profitably
Strategic Business Planning for Commercial
Producers
Management Philosophies
Production Marketing
Concept Concept
Starting Product Market
Point
Product Quality
Focus and Features Customer needs
Improving
production & Integrated
Means distribution Marketing
efficiency
Profits
Ends Profits through through
sales volume customer
satisfaction
Strategic Business Planning for Commercial
Producers
Building A Strategic
Marketing Plan
Strategic Business Planning for Commercial
Producers
– Segmentation
Customer/Consumer
Trends Consumers
Customers
•
•
3. Competitor/Value
Creation Analysis
• Make sure you are distinctively
different
from your competition
in areas of importance
to your customers
• Competitive
analysis
• Reallocation of
resources if
necessary
• Positioning
Strategic Business Planning for Commercial
Producers
T h e V a lu e C h a in
Firm Infrastructure
MA
Supporting
RG
Activities
Technological Development
IN
Procurement
IN
Activities
Primary
RG
MA
Relationship with Suppliers Relationship with Buyers
Strategic Business Planning for Commercial
Producers
4. Determining the
Marketing Mix
• The set of controllable variables
that will accomplish the
marketing objectives:
• Product strategy
• Place (distribution) strategy
• Promotion (communication)
strategy
• Pricing strategy
Strategic Business Planning for Commercial
Producers
Product Strategy
• Portfolio of Products
– Corn, soybeans, hogs, dairy, cattle, value-added
grain, fruits and vegetables, custom farming
operations, custom feeding operations
– Fits your strengths and weaknesses
– Provides acceptable risk/return tradeoff
– Meets needs of a particular customer segment
• Quality
– No. 1 versus No. 2
– GMO vs. non-GMO
• Service
– Timely custom operations
– Pre-sorting of grain or livestock quality
• Volume
– Large and small quantities
– Guaranteed volumes (contract)
Strategic Business Planning for Commercial
Producers
McDonald’s Product
Package
• Food
• Fast service
• Fun for the kids
• Variety
• Non-smoking
• Consistent product
Strategic Business Planning for Commercial
Producers
Waxy Corn
• Corn with specific type of starch
• Delivery Schedule
• Specific hybrids
• Quality requirements
• Purity level
Strategic Business Planning for Commercial
Producers
Place Strategy
• Storage
– On-farm vs. off-farm
– Segregated or IP
• Timing
– On-demand
– Equal amounts throughout the year
• Location
– Delivery to multiple points
• Assortments
– Delivery of different amounts to different places
at different times
Strategic Business Planning for Commercial
Producers
American Crystal
Sugar (ACS)
• M&M Mars changed from a
commodity focus for inputs to a
quality assurance focus.
• ACS keeps the sugar silo at the
M&M Mars plant full.
• ACS shifted from a warehouse
next to the ACS factory in
Minnesota to an ACS
warehouse in Pennsylvania
near the candy plant.
Strategic Business Planning for Commercial
Producers
Spring Wheat
Bakers
• Farmer-owned cooperative that
processes wheat, grown on
Northern Plains into flour
• Frozen and par-baked bread
factory in Atlanta, Georgia, a
population center
Strategic Business Planning for Commercial
Producers
Promotion Strategy
• Advertising
– Creating brochures and other advertisements
on the products your farm provides and
what value they add
– Creating a farm logo
• Personal Selling
– Telling your customers how you create value
– Meeting your grain elevator manager for
coffee
– Having lunch with the lender
– Taking a Christmas pie to your landlord(s)
• Public Relations
– Being a good neighbor
– Being involved in the community
Strategic Business Planning for Commercial
Producers
Price Strategy
Price is the cost the customer
•
Pricing Methods
• Value-Based Pricing
– Set price based on buyers’
perception of value (rather than
on the seller’s costs)
• Cost-Based Pricing
– Add a standard markup to the
cost of the product
• Competition-Based Pricing
– Set price based on following
competitors’ prices
Strategic Business Planning for Commercial
Producers
Value-Based Pricing
•Customer Oriented
•Based on
customer ’ s
perceived value
•Match price to
perceived value
•Brand loyalty
Strategic Business Planning for Commercial
Producers
Competition-Based
Pricing
• Price decision
based on
actions of
competition
• Less attention on
cost or product
demand
• Large firms all
charge the
same price
• Smaller firms
follow lead of
large firms,
may offer a
Strategic Business Planning for Commercial
Producers
6. Implementation and
Control
• Focus attention of everyone on
delivering what the customer
wants
– Management of people
– Monitoring and control
Strategic Business Planning for Commercial
Producers
Commodity Marketing
• Homogeneous Product –
• differentiation in services, not
product.
•
• Low-cost strategy
•
What Is A Marketing
Plan?
• A marketing plan is an outline of
price, date and quantity objectives
used to generate a reasonable return
for the business given the existing
market conditions.
Strategic Business Planning for Commercial
Producers
D ia g ra m o f A C o rn
M a rk e tin g P la n
Date Triggers
• Proper perspective
•
• Introduces discipline
•
• What if …...
•
Strategic Business Planning for Commercial
Producers
Steps In A Marketing
Plan
• Relationship between the business plan
and marketing plan
• Production history and expectations
• Expected prices
• Production costs
• Price and date targets
• Review and evaluation
•
Strategic Business Planning for Commercial
Producers
Price Expectations
• Assess the situation
– Historic patterns (seasonal)
– Basis patterns
•
AgMAS – An Objective
Study of Market Advisory
Services
• 25 Firms – subscribe to each service.
• Observe and follow recommendations
• Compare to a benchmark price
answer Questions:
– Do they consistently beat the
benchmark?
– Do they reduce risk and increase
returns?
– Are they as good with corn as with
soybeans?
Strategic Business Planning for Commercial
Producers
The Difference
• What’s the difference between
the market advisory service
and the marketing plan?
– “Beat the Market” vs. “Accepting
What the Market is Giving.”
– Active Marketing = Private
Information
– Active Marketing vs. Passive
Marketing
Strategic Business Planning for Commercial
Producers
Cost of Production
• What are the costs?
• What revenue cover costs?
• What price is needed to cover
the costs?
• Is this price realistic?
•
Strategic Business Planning for Commercial
Producers
– Prices attainable?
– Risk perceptions
Strategic Business Planning for Commercial
Producers
• Stay disciplined!
• Evaluate your actions.
• Are conditions changing?
Strategic Business Planning for Commercial
Producers
A Little Marketing
Philosophy ...
Strategic Business
Planning for Commercial
Producers